Generic Strategies, Human Resource Development and Performance of Deposit Taking Savings and Credit Co-Operative Societies in Nairobi County, Kenya

Abstract

Various researches in the recent past indicate that generic strategies can have effects on the performance of SACCOs; SACCOs that have adopted generic strategies have gone in a long way to improve on their performance. The Study sought to investigate generic strategies human resource development and performance of SACCOs in Nairobi County. The specific objectives of the study were to establish the extent to which generic strategies are utilised among SACCOs in Nairobi County, to determine the relationship between generic strategies and performance of SACCOs in Nairobi county, to determine the mediating effect of human resource development on the relationship between generic strategies and performance of SACCOs and to examine challenges in utilization of generic strategies by Saccos in Nairobi county. The study was anchored on two theories; Porter’s generic strategies and human resource capital; the study also used resource based view to discuss aspects of human resource development. This study applied a cross-sectional survey design to give an in-depth understanding of the generic strategies and Human resource development on the performance of DT-SACCOs. The study population was from 44 deposit taking SACCOs in Nairobi County. The 44 DT-SACCOs operating in Nairobi County are grouped into three levels known as ‘tiers’ based on their asset size. The study adopted a census research hence no sampling was done. A total of 132 people formed the study target respondents who comprised of; finance manager, human resource manager and marketing/business development manager. The individuals were purposively selected since they had the necessary information relevant to the study, ranging from strategies implemented within their SACCOs, human resource development and performance of the SACCO. Data was collected through administration of questionnaires. Computer packages especially Statistical Packages for Social Sciences system version 20 (SPSS) was used to analyse data based on the structured equation. This study employed multiple linear regression models. The study is of significance to the management of DT-SACCOs and other institutions in positioning themselves strategically towards the realization of organizational objectives and goals. The study found that cost leadership strategy had a positive and significant relationship with SACCO performance. The study also found that differentiation strategy and SACCO performance were positively and significantly related. Further, the study found that focus strategy had a positive and significant relationship with performance of SACCOs. Furthermore, the study found that the combined effect of the generic strategies on SACCO performance was higher than the effect of individual strategies. The study also found that human resource development had partial mediation on the relationship between generic strategies and SACCO performance. The research was limited in accessing of information because of the nature of information the researcher was seeking. However, the respondents were assured on their confidentiality and the research was purely for academic purpose. The challenges encountered by SACCOs include; imitation from other competitors that affected the cost leadership strategy and the differentiation strategy, changes in customer tastes and unwillingness by customers to pay is a challenge encountered in utilizing the differentiation strategy and changes in the target market that affected the focus strategy. The SACCO management is recommended to seek to adopt all the generic strategies in their practices and not an individual strategy. The study also recommends that besides the implementation of the generic strategies, the SACCO should seek to develop their staff through trainings, motivation and other ways of developing their capabilities that will foster the effect of generic strategies on performance.